The threat to the Premier League as a competitive spectacle

Although the team I support Is not in the top flight, I enjoy the quality of the Premier League.  My wife takes a probably common position when she insists that football is limited to the Premier League, La Liga and the Champions League.

Yet this successful global product is in danger of devouring itself by becoming less competitive.

In 18 of the 33 Premier League seasons to the end of 2024-25, the club with the largest wage bill won the division (including six years out of the last eight); the second-highest payer has won it nine times, the third-highest four times and the fourth-highest on one occasion. Only once, with Leicester City’s title in 2016, has a club outside of the top four payers won England’s top tier since 1992.

At their core, the different (financial) SCR rules (Premier League and Uefa) do have one through-line: they limit club spending on the above costs to a set percentage of relevant income, which in the Premier League’s case amounts to annual turnover plus an average of their player profits over the past three seasons.

La Liga boss Javier Tebas is more sceptical. Speaking at the Financial Times’ Business of Football Summit in London in February, he was far from impressed with the rules introduced by his English counterparts.

Rather than improving football’s finances, Tebas warned the Premier League’s rule shift could instead fuel even more inflation within the game. He also scoffed at the 85 per cent limit as anything that could amount to promoting sustainability, citing the impossibility of running a club with the remaining 15 per cent of income. He had a point: in 2024-25, average operating costs at Premier League clubs, so not even including the non-playing staff which aren’t covered in SCR, were 27 per cent of revenues.

It’s already well known that six clubs earn much more than the rest in England, and the size of the gulf means the introduction of a rule which now tethers spending to revenues for everyone, not just those clubs competing in Europe, will likely make it harder for less wealthy clubs to catch up. Several sources told The Athletic that the new rules will worsen, rather than improve, competitive balance in the division.

As a thought experiment, consider the SCR limits for Premier League clubs if the ‘Big Six’ of Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur are limited to 70 per cent, while the rest can spend 85 per cent.

Even in this scenario, using 2024-25 revenues as a basis, those six clubs could outspend the rest, often significantly so. Note this was in a season when Aston Villa were in the Champions League while both Tottenham and Chelsea were not, yet those two clubs’ non-broadcast revenues are so much higher that they could still outspend all but their richest peers. Half the division’s spending limit would have been pegged at around half the level of the lowest of the Big Six.

Tottenham’s boost

Tottenham received a further £100m in shareholder funding in June and have engaged in the largest transfer spend in their history, even as they hardly skimped previously.  Spurs’ wage bill has long trailed their ‘Big Six’ counterparts but that is on the rise too, and the removal of operating costs which topped £200m in 2024-25 and interest charges consistently above £40m annually — two types of expenditure included in PSR calculations but not in SCR — alongside a shift away from a sustainable model has allowed them to markedly increase spending on the squad.  Spurs fans might well say ‘not before time’, although the fan interviewed on Radio 5 sounded surprisingly downbeat.

The Premier League compares favourably to most peers on a competitive balance front; it is one of the reasons the league is so popular. Yet the monopolisation that plagues other top tiers, while not as stark in England, is creeping in.

In 34 years of the Premier League, seven clubs have won it, though two of those — Blackburn Rovers and Leicester — are one-time winners. In the 34 years prior to the Premier League’s founding in 1992, 13 teams won England’s First Division.

What’s more, evidence suggests dominance at the top is increasing. The average points earned by England’s champions has surged this century; correspondingly, those at the bottom of the table are picking up ever fewer victories.  No disrespect to the promoted sides, but most pundits seem to think that all three of them will go down this season, although Coventry City could survive.

As the difference in Premier League finishing position amounts to more and more money — six teams entered last season’s final day with a range of six possible finishing positions, a range of possibilities that equated to an £18.8m difference in prize money — the rules allow clubs to include the previous season’s merit money in their estimated revenues for the upcoming one, for the purposes of calculating their SCR cost limit. 

To serve that particular end, the Premier League has talked up the prospect of the rest of the division having a higher spending limit, but that quickly runs into trouble if a club succeeds in qualifying for Europe and needs to get its ratio down quickly. It is especially a problem in UEFA’s less remunerated competitions, in which the uplift in prize money is absorbed by the reduction in spending ability.

The case of Brighton

In the case of Brighton, who finished eighth last season and will now compete in the Conference League, the increase in revenues from playing in Europe (if they successfully make it to the league phase) is likely subsumed by the 15 per cent reduction in spending limit (to comply with UEFA’s SCR rules).

A reasonable minimum estimate of Brighton’s revenues had they finished ninth last season lands at around £230m, and 15 per cent of that, being the difference between UEFA and Premier League SCR limits, totals £34m — or £12m more than the uplift in spending capacity, in even a generous hypothetical, that they’ll enjoy from qualifying for Europe. In other words, under this estimate, Brighton will be able to spend £12m less than if they’d finished ninth and missed out on UEFA competition entirely.

Brighton ultimately voted against SCR, and later tabled an amendment that would have allowed clubs to allocate player profits as they saw fit over a three-year period, rather than each year’s SCR calculation including an equal third. That would have been useful for clubs like Brighton, who more heavily lean on a player trading model to compete with richer outfits. It is not part of the new regime.

In a relative sense, there is little to complain about. Compared to leagues in France and Germany and, to a lesser extent, Spain, there is genuine competition at the top of English football. Newly promoted Coventry City travelled to champions Arsenal on Friday evening as significant underdogs but not to the extent found elsewhere. The Premier League distributes its money more fairly than any other rich European league.

Yet the chances of most winning the division are slim to none. That is a problem for a sport and, if the cakewalks seen elsewhere aren’t present in England, it does not mean the Premier League is trending in the right direction. And all of this is without mentioning the impact huge spending on the top tier has further down the English pyramid, where loss-making is rampant.